In the Baulmol-Tibin model of money demand, trips to the bank cost $8.5 the interest rate is 9%. If you plan to gradually spend $3,000 this year, how many trips to the bank you should make? What is your average money holding?

Exploring Economics
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ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter25: Money, Banking, And The Federal Reserve System
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In the Baulmol-Tibin model of money demand, trips to the bank cost $8.5 the interest rate is 9%. If you plan to gradually spend $3,000 this year, how many trips to the bank you should make? What is your average money holding?
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